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Insurance Marginal or no hike in the third party motor insurance premium

Marginal or no hike in the third party motor insurance premium

IRDAI has kept the third party motor insurance premium rates either unchanged or hiked it marginally this year.
Team Cafemutual Mar 29, 2018

After the steep hike of 40-50% for two consecutive years, IRDAI has kept the third party motor insurance premium rates either unchanged or hiked it marginally this year. In fact, the insurance regulator has reduced third party motor insurance premium rates in small segment vehicles.

Every year, the insurance regulator revises premium rates taking into account the number of claims made and loss ratios for insurers. Third party motor insurance is mandatory in India. However, General Insurance Council data shows that only 40% of vehicles plying in Indian roads are insured.

IRDAI has reduced the third party premium rates for private cars with engine capacity not exceeding 1000cc from Rs.2,055 to Rs.1,850. However, very few car models such as Alto 800, WagonR and Hyundai EON come under this segment.

However, for high-end cars, with engine capacity between 1000-1500cc like Swift, Swift Dzire and i10 and cars with engine capacity above 1500cc (i20, Honda City and Ecosports), IRDAI has kept the premium rates unchanged for FY 2018-19. Currently, cars with engine capacity between 1000-1500 cc charge Rs.2863 and cars with engine capacity exceeding 1500cc charge Rs.7890.

Similarly, in the two-wheeler category, the revised premium for engine capacity between 75-150cc is flat at Rs.720. For premium bike models, with engine capacity between 150-350cc, IRDAI has increased rates by 11% from Rs.887 to Rs.985. The hike rate for super bikes with engine capacity exceeding 350cc would be 128%; as a result, the premium is increased from the present Rs. 1,019 to Rs.2,323.


 

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